I.4 How could an anarchist economy function?

This is an important question facing all opponents of a given system - what
will you replace it with? We can say, of course, that it is pointless making
blue-prints of how a future anarchist society will work as the future will
be created by everyone, not just the few anarchists and libertarian socialists
who write books and FAQs. This is very true, we cannot predict what a free
society will actually be like or develop and we have no intention to do
so here. However, this reply (whatever its other merits) ignores a key point,
people need to have some idea of what anarchism aims for before they decide
to spend their lives trying to create it.

So, how would an anarchist system function? That depends on the economic
ideas people have. A mutualist economy will function differently than a
communist one, for example, but they will have similar features. As Rudolf
Rocker put it, "[c]ommon to all Anarchists is the desire to free society of
all political and social coercive institutions which stand in the way of
the development of a free humanity. In this sense, Mutualism, Collectivism,
and Communism are not to be regarded as closed systems permitting no further
development, but merely assumptions as to the means of safeguarding a free
community. There will even probably be in the society of the future different
forms of economic cooperation existing side-by-side, since any social
progress must be associated with that free experimentation and practical
testing-out for which in a society of free communities there will be
afforded every opportunity." [Anarcho-Syndicalism, p.16]

So, given the common aims of anarchists, its unsurprising that the economic
systems they suggest will have common features. For all anarchists, a
"voluntary association that will organise labour, and be the manufacturer and
distributor of necessary commodities... is to make what is useful. The
individual is to make what is beautiful." [Oscar Wilde, The Soul of Man
Under Socialism, page 25] Or, to bring this ideal up to day, as Chomsky
put it, "[t]he task for a modern industrial society is to achieve what is
now technically realizable, namely, a society which is really based on free
voluntary participation of people who produce and create, live their lives
freely within institutions they control, and with limited hierarchical
structures, possibly none at all."

In other words, anarchists desire to organise voluntary workers associations
which will try to ensure a minimisation of mindless labour in order to maximise
the time available for creative activity both inside and outside "work." This
is to be achieved by free cooperation between equals, for while competition may
be the "law" of the jungle, cooperation is the law of civilisation.

This cooperation is not based on "altruism," but self-interest As Proudhon
argued, "Mutuality, reciprocity exists when all the workers in an industry
instead of working for an entrepreneur who pays them and keeps their products,
work for one another and thus collaborate in the making of a common product
whose profits they share amongst themselves. Extend the principle of reciprocity
as uniting the work of every group, to the Workers' Societies as units, and
you have created a form of civilisation which from all points of view -
political, economic and aesthetic - is radically different from all earlier
civilisations." [quoted by Martin Buber, Paths in Utopia, page 29-30]
In other words, solidarity and cooperation allows us time to enjoy life
and to gain the benefits of our labour ourselves - Mutual Aid results in a
better life than mutual struggle and so "the association for struggle will
be a much more effective support for civilisation, progress, and evolution
than is the struggle for existence with its savage daily competitions."
[Luigi Geallani, The End of Anarchism, p. 26]

Combined with this desire for free cooperation, is a desire to end centralised
systems. The opposition to centralisation is often framed in a distinctly
false manner. This can be seen when Alex Nove, a leading market socialist,
argues that "there are horizontal links (market), there are vertical links
(hierarchy). What other dimension is there?" [Alex Nove, The Economics of
Feasible Socialism, p. 226] In other words, Nove states that to oppose
central planning means to embrace the market. This, however, is not true.
Horizontal links need not be market based any more than vertical links need
be hierarchical. But the core point in his argument is very true, an
anarchist society must be based essentially on horizontal links between
individuals and associations, freely cooperating together as they (not a
central body) sees fit. This cooperation will be source of any "vertical"
links in an anarchist economy. When a group of individuals or associations
meet together and discuss common interests and make common decisions they
will be bound by their own decisions. This is radically different from a
a central body giving out orders because those affected will determine
the content of these decisions. In other words, instead of decisions being
handed down from the top, they will be created from the bottom up.

So, while refusing to define exactly how an anarchist system will work, we
will explore the implications of how the anarchist principles and ideals
outlined above could be put into practice. Bare in mind that this is just
a possible framework for a system which has few historical examples to draw
upon as evidence. This means that we can only indicate the general outlines
of what an anarchist society could be like. Those seeking "recipes" and
exactness should look elsewhere. In all likelihood, the framework we present
will be modified and changed (even ignored) in light of the real experiences
and problems people will face when creating a new society. Lastly we should
point out that there may be a tendency for some to compare this framework with
the theory of capitalism (i.e. perfectly functioning "free" markets or
quasi-perfect ones) as opposed to its reality. A perfectly working capitalist
system only exists in text books and in the heads of ideologues who take the
theory as reality. No system is perfect, particularly capitalism, and to
compare "perfect" capitalism with any system is a pointless task.

In other words, anarchists desire "to combine the best part (in fact, the
only good part) of work -- the production of use-values -- with the best
of play. . . its freedom and its fun, its voluntariness and its
intrinsic gratification" - the transformation of what economists call
production into productive play. [Bob Black, Smokestack Lightning]

In addition, a decentralised system will build up a sense of community and
trust between individuals and ensure the creation of an ethical economy, one
based on interactions between individuals and not commodities caught in the
flux of market forces. This ideal of a "moral economy" can be seen in both
social anarchists desire for the end of the market system and the
individualists insistence that "cost be the limit of price." Anarchists
recognise that the "traditional local market. . .is essentially different
from the market as it developed in modern capitalism. Bartering on a local
market offered an opportunity to meet for the purpose of exchanging
commodities. Producers and customers became acquainted; they were relatively
small groups. . .The modern market is no longer a meeting place but a
mechanism characterized by abstract and impersonal demand. One produces
for this market, not for a known circle of customers; its verdict is based
on laws of supply and demand." [Man for Himself, pp. 67-68]

Anarchists reject the capitalist notion that economic activity should be based
on maximising profit as the be all and end all of such work (buying and
selling on the "impersonal market"). As markets only work through people,
individuals, who buy and sell (but, in the end, control them - in "free
markets" only the market is free) this means that for the market to be
"impersonal" as it is in capitalism it implies that those involved have to
be unconcerned about personalities, including their own. Profit, not ethics,
is what counts. The "impersonal" market suggests individuals who act
in an impersonal, and so unethical, manner. The morality of what they
produce is irrelevant, as long as profits are produced.

Instead, anarchists consider economic activity as an expression of the
human spirit, an expression of the innate human need to express ourselves
and to create. Capitalism distorts these needs and makes economic activity
a deadening experience by the division of labour and hierarchy. Anarchists
think remember that "industry is not an end in itself, but should only be
a means to ensure to man his material subsistence and to make accessible to
him the blessings of a higher intellectual culture. Where industry is
everything and man is nothing begins the realm of a ruthless economic
despotism whose workings are no less disastrous than those of any political
despotism. The two mutually augment one another, and they are fed from the
same source." [Rudolph Rocker, Anarcho-Syndicalism].

Anarchists think that a decentralised social system will allow "work" to
be abolished and economic activity humanised and made a means to an end
(namely producing useful things and liberated individuals). This would
be achieved by, as Rudolf Rocker puts it, the "alliance of free groups of
men and women based on co-operative labor and a planned administration of
things in the interest of the community." [Ibib.]

However, as things are produced by people, it could be suggested that a
"planned administration of things" implies a "planned administration of
people" (although few who suggest this danger apply it to capitalist firms
which are like mini-centrally planned states). This objection false simply
because anarchism aims "to reconstruct the economic life of the peoples
from the ground up and build it up in the spirit of Socialism." [Ibib.]

In other words, those who produce also administer and so govern themselves
in free association (and it should be pointed out that any group of
individuals in association will make "plans" and "plan," the important
question is who does the planning and who does the work. Only in anarchy
are both functions united into the same people). Rocker emphasizes this
point when he writes that

"Anarcho-syndicalists are convinced that a Socialist economic
order cannot be created by the decrees and statutes of a
government, but only by the solidaric collaboration of the
workers with hand and brain in each special branch of production;
that is, through the taking over of the management of all plants
by the producers themselves under such form that the separate
groups, plants, and branches of industry are independent members
of the general economic organism and systematically carry on
production and the distribution of the products in the interest
of the community on the basis of free mutual agreements."
[Op. Cit. p. 94]

In other words, the "planned administration of things" would be done
by the producers themselves, in independent groupings. This would likely
take the form (as we indicated in section I.3) of confederations of
syndicates who communicate information between themselves and response to
changes in the production and distribution of products by increasing or
decreasing the required means of production in a cooperative (i.e. "planned")
fashion. No "central planning" or "central planners" governing the economy,
just workers cooperating together as equals.

Therefore, an anarchist society would abolish work by ensuring that
those who do the work actually control it. They would do so in a network
of self-managed associations, a society "composed of a number of societies
banded together for everything that demands a common effort: federations
of producers for all kinds of production, of societies for consumption . . .
All these groups will unite their efforts through mutual agreement . . .
Personal initiative will be encouraged and every tendency to uniformity
and centralisation combated" [Peter Kropotkin, quoted by Buber in Paths
in Utopia]

In response to consumption patterns, syndicates will have to expand or
reduce production and will have to attract volunteers to go the necessary
work. The very basis of free association will ensure the abolition of work,
as individuals will apply for "work" they enjoy doing and so would be
interested in reducing "work" they did not want to do to a minimum. Such
a decentralisation of power would unleash a wealth of innovation and ensure
that unpleasant work be minimalised and fairly shared (see section
I.4.13).

Now, any form of association requires agreement. Therefore, even a society
based on the communist-anarchist maxim "from each according to their
ability, to each according to their need" will need to make agreements
in order to ensure cooperative ventures succeed. In other words, members of
a cooperative commonwealth would have to make and keep to their agreements
between themselves. This means that syndicates would agree joint starting and
finishing times, require notice if individuals want to change "jobs" and
so on within and between syndicates. Any joint effort requires some degree
of cooperation and agreement. Therefore, between syndicates, an agreement
would be reached (in all likelihood) that determined the minimum working
hours required by all members of society able to work. How that minimum
was actually organised would vary between workplace and commune, with
worktimes, flexi-time, job rotation and so on determined by each syndicate
(for example, one syndicate may work 8 hours a day, another 4, one may
use flexi-time, another more rigid starting and stopping times).

As Kropotkin argued, an anarchist-communist society would be based upon the
following kind of "contract" between its members:

"We undertake to give you the use of our houses, stores, streets,
means of transport, schools, museums, etc., on condition that, from twenty
to forty-five or fifty years of age, you consecrate four or five hours a
day to some work recognised as necessary to existence. Choose yourself the
producing group which you wish to join, or organize a new group, provided
that it will undertake to produce necessaries. And as for the remainder of
your time, combine together with whomsoever you like, for recreation, art,
or science, according to the bent of your taste . . . Twelve or fifteen
hundred hours of work a year . . . is all we ask of you."
[The Conquest of Bread, p. 153-4]

With such work "necessary to existence" being recognised by individuals
and expressed by demand for labour from productive syndicates. It is, of
course, up to the individual to decide which work he or she desires to
perform from the positions available in the various associations in
existence. A union card would be the means by which work hours would be
recorded and access to the common wealth of society ensured. And, of course,
individuals and groups are free to work alone and exchange the produce of
their labour with others, including the confederated syndicates, if they so
desired. An anarchist society will be as flexible as possible.

Therefore, we can imagine a social anarchist society being based on two basic
arrangements -- firstly, an agreed minimum working week of, say, 20 hours,
in a syndicate of your choice, plus any amount of hours doing "work" which
you feel like doing - for example, art, experimentation, DIY, composing,
gardening and so on. The aim of technological progress would be to reduce
the basic working week more and more until the very concept of necessary
"work" and free time enjoyments is abolished. In addition, in work considered
dangerous or unwanted, then volunteers could trade doing a few hours of
such activity for more free time (see section I.4.13 for more on this).

It can be said that this sort of agreement is a restriction of liberty
because it is "man-made" (as opposed to the "natural law" of "supply
and demand"). This is a common defense of the free market by individualist
anarchists against anarcho-communism, for example. However, while in theory
individualist-anarchists can claim that in their vision of society, they
don't care when, where, or how a person earns a living, as long as they are
not invasive about it the fact is that any economy is based on interactions
between individuals. The law of "supply and demand" easily, and often, makes
a mockery of the ideas that individuals can work as long as they like -
usually they end up working as long as required by market forces (ie the
actions of other individuals, but turned into a force outwith their control,
see section I.1.3). This means that individuals do not work as long as
they like, but as long as they have to in order to survive. Knowing that
"market forces" is the cause of long hours of work hardly makes them any
nicer.

And it seems strange to the communist-anarchist that certain free agreements
made between equals can be considered authoritarian while others are not.
The individualist-anarchist argument that social cooperation to reduce
labour is "authoritarian" while agreements between individuals on the
market are not seems illogical to social anarchists. They cannot see
how its better for individuals to be pressured into working longer than
they desire by "invisible hands" than to come to an arrangement with others
to manage their own affairs to maximise their free time.

Therefore, free agreement between free and equal individuals is considered
the key to abolishing work, based upon decentralisation of power and
the use of appropriate technology.

As will be discussed in more depth later (see section I.4.7) information
about consumption patterns will be recorded and used by workers to inform
their production and investment decisions. In addition, we can imagine that
production syndicates would encourage communes as well as consumer groups and
cooperatives to participate in making these decisions. This would ensure
that produced goods reflect consumer needs. Moreover, as conditions permit,
the exchange functions of the communal "banks" would (in all likelihood) be
gradually replaced by the distribution of goods "in accordance with the needs
of the consumers." In other words, most supporters of collectivist anarchism
see it has a temporary measure before anarcho-communism could develop.

Communist anarchism would be similar to collectivism, i.e. a system of
confederations of collectives, communes and distribution centers ("Communal
stores"). However, in an anarcho-communist system, prices are not used. How
will economic decision making be done? One possible solution is as follows:

"As to decisions involving choices of a general nature, such as what forms
of energy to use, which of two or more materials to employ to produce a
particular good, whether to build a new factory, there is a ... technique...
that could be [used]... 'cost-benefit analysis'... in socialism a points
scheme for attributing relative importance to the various relevant
considerations could be used... The points attributed to these considerations
would be subjective, in the sense that this would depend on a deliberate
social decision rather than some objective standard, but this is the case
even under capitalism when a monetary value has to be attributed to some
such 'cost' or 'benefit'... In the sense that one of the aims of socialism
is precisely to rescue humankind from the capitalist fixation with
production time/money, cost-benefit analyses, as a means of taking into
account other factors, could therefore be said to be more appropriate for
use in socialism than under capitalism. Using points systems to attribute
relative importance in this way would not be to recreate some universal
unit of evaluation and calculation, but simple to employ a technique to
facilitate decision-making in particular concrete cases." [Adam Buick and
John Crump, State Capitalism: The Wages System Under New Management,
pp. 138-139]

This points system would be the means by which producers and consumers
would be able to determine whether the use of a particular good is
efficient or not. Unlike prices, this cost-benefit analysis system would
ensure that production and consumption reflects social and ecological costs,
awareness and priorities. Of course, as well as absolute scarcity, prices
also reflect relative scarcity (while in the long term, market prices
tend towards their production price, in the short term prices can change
as a result of changes in supply and demand under capitalism). How a communist
society could take into account such short term changes and communicate them
through out the economy is discussed in section I.4.5 (What about "supply and
demand"?). Needless to say, production and investment decisions based upon
such cost-benefit analysis would take into account the current production
situation and so the relative scarcity of specific goods.

Therefore, a communist-anarchist society would be based around a network
of syndicates who communicate information between each other. Instead of
the "price" being communicated between workplaces as in capitalism, actual
physical data will be sent. This data is a summary of the use values
of the good (for example labour time and energy used to produce it,
pollution details, relative scarcity and so forth). With this information a
cost-benefit analysis will be conducted to determine which good will be best
to use in a given situation based upon mutually agreed common values. The
data for a given workplace could be compared to the industry as a whole (as
confederations of syndicates would gather and produce such information - see
section I.3.5) in order to determine whether a specific workplace will
efficiently produce the required goods (this system has the additional
advantage of indicating which workplaces require investment to bring them
in line, or improve upon, the industrial average in terms of working
conditions, hours worked and so on). In addition, common rules of thumb
would possibly be agreed, such as agreements not to use scarce materials
unless there is no alternative (either ones that use a lot of labour,
energy and time to produce or those whose demand is currently exceeding
supply capacity).

Similarly, when ordering goods, the syndicate, commune or individual involved
will have to inform the syndicate why it is required in order to allow the
syndicate to determine if they desire to produce the good and to enable them
to prioritise the orders they receive. In this way, resource use can be guided
by social considerations and "unreasonable" requests ignored (for example, if
an individual "needs" a ship-builders syndicate to build a ship for his
personal use, the ship-builders may not "need" to build it and instead builds
ships for the transportation of freight). However, in almost all cases of
individual consumption, no such information will be needed as communal stores
would order consumer goods in bulk as they do now. Hence the economy would be
a vast network of cooperating individuals and workplaces and the dispersed
knowledge which exists within any society can be put to good effect (better
effect than under capitalism because it does not hide social and ecological
costs in the way market prices do and cooperation will eliminate the business
cycle and its resulting social problems).

Therefore, production units in a social anarchist society, by virtue of
their autonomy within association, are aware of what is socially useful
for them to produce and, by virtue of their links with communes, also
aware of the social (human and ecological) cost of the resources they
need to produce it. They can combine this knowledge, reflecting overall
social priorities, with their local knowledge of the detailed circumstances
of their workplaces and communities to decide how they can best use their
productive capacity. In this way the division of knowledge within society
can be used by the syndicates effectively as well as overcoming the
restrictions within knowledge communication imposed by the price mechanism.

Moreover, production units, by their association within confederations
(or Guilds) ensure that there is effective communication between them. This
results in a process of negotiated coordination between equals (i.e horizontal
links and agreements) for major investment decisions, thus bringing together
supply and demand and allowing the plans of the various units to be
coordinated. By this process of co-operation, production units can reduce
duplicating effort and so reduce the waste associated with over-investment
(and so the irrationalities of booms and slumps associated with the price
mechanism, which does not provide sufficient information to allow
workplaces to efficiently coordinate their plans - see section
C.7.1).

One final point on this subject. As social anarchists consider it important
to encourage all to participate in the decisions that affect their lives,
it would be the role of communal confederations to determine the relative
points value of given inputs and outputs. In this way, all individuals in a
community determine how their society develops, so ensuring that economic
activity is responsible to social needs and takes into account the desires of
everyone affected by production. In this way the problems associated with
the "Isolation Paradox" (see section B.6) can be over come and so consumption
and production can be harmonised with the needs of individuals as members
of society and the environment they live in.

In a non-Mutualist anarchist system it is assumed that confederations of
collectives will wish to adjust they capacity if they are aware of the need
to do so. Hence, price changes in response to changes in demand would not
be necessary to provide the information that such changes are required. This
is because a "change in demand first becomes apparent as a change in the
quantity being sold at existing prices [or being consumed in a moneyless
system] and is therefore reflected in changes in stocks or orders. Such
changes are perfectly good indicators or signals that an imbalance between
demand and current output has developed. If a change in demand for its
products proved to be permanent, a production unit would find its stocks
being run down and its order book lengthening, or its stocks increasing and
orders falling....Price changes in response to changes in demand are therefore
not necessary for the purpose of providing information about the need to
adjust capacity" [Pat Devine, Democracy and Economic Planning, p. 242]

Therefore, to indicate the relative changes in scarcity of a given good
it will be necessary to calculate a "scarcity index." This would inform
potential users of this good so that they may effectively adjust their
decisions in light of the decisions of others. This index could be, for
example, a percentage value which indicates the relation of orders placed
for a commodity to the amount actually produced. For example, a good which
has a demand higher than its supply would have an index value of 101% or
higher. This value would inform potential users to start looking for
substitutes for it or to economise on its use. Such a scarcity figure would
exist for each collective as well as (possibly) a generalised figure for
the industry as a whole on a regional, "national," etc. level. In this way,
a specific good could be seen to be in high demand and so only those
producers who really required it would place orders for it (so ensuring
effective use of resources). Needless to say, stock levels and other
basic book-keeping techniques would be utilised in order to ensure a
suitable buffer level of a specific good to take into account unexpected
changes in consumption. This may result in some excess supply of goods
being produced and used as used as stock to buffer out unexpected changes
in the aggregate demand for a good.

This, combined with cost-benefit analysis described in section I.4.4, would
allow information about changes within the "economy" to rapidly spread
throughout the whole system and influence all decision makers without
the great majority knowing anything about the original causes of these
changes (which rest in the decisions of those directly affected). The
relevant information is communicated to all involved, without having to
be order by an "all-knowing" central body as in a Leninist centrally
planned economy. As argued in section I.1.2, anarchists have long realised
that no centralised body could possibly be able to possess all the
information dispersed throughout the economy and if such a body attempted
to do so, the resulting bureaucracy would effectively reduce the amount of
information available to society and so cause shortages and inefficiencies.

Therefore, each syndicate receives its own orders and supplies and sends
its own produce out. Similarly, communal distribution centers would order
required goods from syndicates it determines. In this way consumers can
change to syndicates which respond to their needs and so production units
are aware of what it is socially useful for them to produce as well as the
social cost of the resources they need to produce it. In this way a network
of horizontal relations spread across society, with coordination achieved
by equality of association and not the hierarchy of the corporate structure.
This system ensures a cooperative response to changes in supply and
demand and so reduces the communication problems associated with the
market which help causes periods of unemployment and economic downturn
(see section C.7.1).

While anarchists are aware of the "isolation paradox" (see section B.6)
this does not mean that they think the commune should make decisions for
people on what they were to consume. This would be a prison. No, all
anarchists agree that is up to the individual to determine their own needs
and for the collectives they join to determine social requirements like parks,
infrastructure improvements and so on. However, social anarchists think that
it would be beneficial to discuss the framework around which these decisions
would be made. This would mean, for example, that communes would agree to
produce eco-friendly products, reduce waste and generally make decisions
enriched by social interaction. Individuals would still decide which sort
goods they desire, based on what the collectives produce but these goods
would be based on a socially agreed agenda. In this way waste, pollution
and other "externalities" of atomised consumption could be reduced. For
example, while it is rational for individuals to drive a car to work,
collectively this results in massive irrationality (for example, traffic
jams, pollution, illness, unpleasant social infrastuctures). A sane society
would discuss the problems associated with car use and would agree to
produce a fully integrated public transport network which would reduce
pollution, stress, illness, and so on.

Therefore, while anarchists recognise individual tastes and desires, they
are also aware of the social impact of them and so try to create a social
environment where individuals can enrich their personal decisions with the
input of other people's ideas.

On a related subject, it is obvious that different collectives would produce
slightly different goods, so ensuring that people have a choice. It is
doubtful that the current waste implied in multiple products from different
companies (sometimes the same company) all doing the same job would be
continued in an anarchist. However, production will be "variations on a theme"
in order to ensure consumer choice and to allow the producers to know what
features consumers prefer. It would be impossible to sit down before hand
and make a list of what features a good should have - that assumes perfect
knowledge and that technology is fairly constant. Both these assumptions
are of limited use in real life. Therefore, cooperatives would produce
goods with different features and production would change to meet the demand
these differences suggest (for example, factory A produces a new CD player,
and consumption patterns indicate that this is popular and so the rest of
the factories convert). This is in addition to R&D experiments and test
populations. In this way consumer choice would be maintained, and enhanced
as consumers would be able to influence the decisions of the syndicates
as producers (in some cases) and through syndicate/commune dialogue.

Therefore, anarchists do not ignore "supply and demand." Instead, they
recognise the limitations of the capitalist version of this truism and
point out that capitalism is based on effective demand which has no
necessary basis with efficient use of resources. Instead of the market,
social anarchists advocate a system based on horizontal links between
producers which effectively communicates information across society about
the relative changes in supply and demand which reflect actual needs of
society and not bank balances. The response to changes in supply and
demand will be discussed in section I.4.7 (What are the criteria for
investment decisions?) and section I.4.13 ( Who will do the dirty or
unpleasant work?) will discuss the allocation of work tasks.

Similarly with communities. A commune will obviously have to decide upon and
plan civic investment (e.g. new parks, housing and so forth). They will also
have the deciding say in industrial developments in their area as it would
be unfair for syndicate to just decide to build a cement factory next to a
housing cooperative if they did not want it. There is a case for arguing
that the local commune will decide on investment decisions for syndicates
in its area (for example, a syndicate may produce X plans which will be
discussed in the local commune and 1 plan finalised from the debate). For
regional decisions (for example, a new hospital) would be decided at the
appropriate level, with information fed from the health syndicate and
consumer cooperatives. The actual location for investment decisions will
be worked out by those involved. However, local syndicates must be the
focal point for developing new products and investment plans in order to
encourage innovation.

Therefore, under social anarchism no capital market is required to determine
whether investment is required and what form it would take. The work that
apologists for capitalism claim currently is done by the stock market can
be replaced by cooperation and communication between workplaces in a
decentralised, confederated network. The relative needs of different
consumers of a product can be evaluated by the producers and an informed
decision reached on where it would best be used.

Without a capital market, housing, workplaces and so on will no longer
be cramped into the smallest space possible. Instead, housing, schools,
hospitals, workplaces and so on will be built within a "green" environment.
This means that human constructions will be placed within a natural
environment and no longer stand apart from it. In this way human life
can be enriched and the evils of cramping as many humans and things into
a small a space as is "economical" can be overcome.

In addition, the stock market is hardly the means by which capital is
actually raised within capitalism. As Engler points out, "Supporters of the
system... claim that stock exchanges mobilise funds for business. Do they?
When people buy and sell shares, 'no investment goes into company treasuries...
Shares simply change hands for cash in endless repetition.' Company
treasuries get funds only from new equity issues. These accounted for an
average of a mere 0.5 per cent of shares trading in the US during the
1980s." [Apostles of Greed, pp. 157-158] And it hardly needs to be repeated
that capitalism results in production being skewed away from the working
class and that the "efficiency" of market allocation is highly suspect.

Only by taking investment decisions away from "experts" and placing it in
the hands of ordinary people will current generations be able to invest
according to their, and future generations, self-interest. It is hardly in
our interest to have a institution whose aim is to make the wealthy even
wealthier and on whose whims are dependent the lives of millions of people.

Of course technology be used for oppressive ends, as indicated in section
D.10. Human knowledge, like all things, can be used to increase freedom or
to decrease it. Technology is neither "good," nor "bad" per se, but may be
used for either. What can be said is that in a hierarchical society,
technology will be introduced by serves the interests of the powerful and
helps marginalise and disempower the majority. This means that in an
anarchist society, technology would be developed which empowered those who
used it, so reducing any oppressive aspects of it, and, in the words of
Cornelius Castoriadais, the "conscious transformation of technology will
. . .be a central task of a society of free workers." [Workers' Councils
and the Economics of a Self-Managed Society, p. 13]

For example, increased productivity under capitalism usually leads to
further exploitation, displaced workers, etc. But it doesn't have to in
an anarchist world. By way of example, consider a small, self-sufficient
group in which all resources are distributed equally amongst the members.
Let's say that this group has 5 people and, for the sake of argument, 20
man-hours of production per week is spent on baking bread for the group.
Now, what happens if the introduction of automation reduces the
amount of labor required for bread production to 5 man-hours per week?
Clearly, no one stands to lose - even if someone's work is "displaced", that
person will continue to receive the same resource income as before - and
they might even gain. This last is due to the fact that 15 man-hours have
been freed up from the task of bread production, and those man-hours may now
be used elsewhere or converted to leisure, either way increasing each
person's standard of living.

Obviously, this happy outcome derives not only from the technology,
but from its use in an equitable economic system. Certainly, a wide variety
of outcomes would be possible under alternative allocations. Yet, we have
managed to prove our point: in the end, there's no reason why increases in
productivity need lead to a lower standard of living! Therefore, "[f]or
the first time in the history of civilisation, mankind has reached a point
where the means of satisfying its needs are in excess of the needs themselves.
To impose, therefore, as hitherto been done, the curse of misery and
degradation upon vast divisions of mankind, in order to secure well-being
and further development for the few, is needed no more: well-being can be
secured for all, without placing on anyone the burden of oppressive,
degrading toil and humanity can at last build its entire social life
on the bases of justice" [Ethics, p. 2]

Its for these reasons that anarchists have held a wide range of opinions
concerning the relationship between human knowledge and anarchism. Some,
such as Peter Kropotkin, were themselves scientists and saw great potential for
the use of advanced technology to expand human freedom. Others have held
technology at arm's length, concerned about its oppressive uses, and a few
have rejected science and technology completely. All of these are, of course,
possible anarchist positions. But most anarchists support Kropotkin's
viewpoint, but with a healthy dose of practical Luddism when viewing how
technology is (ab)used in capitalism.

So technological advancement is important in a free society in order to
maximise the free time available for everyone and replace mindless toil
with meaningful work. The means of so doing is the use of appropriate
technology (and not the worship of technology as such). Only by
critically evaluating technology and introducing such forms which
empower, are understandable and are controllable by individuals and
communities as well as minimising ecological distribution (in other
words, what is termed appropriate technology) can this be achieved.
Only this critical approach to technology can do justice to the power of
the human mind and reflect the creative powers which developed the technology
in the first place. Unquestioning acceptance of technological progress is
just as bad as being unquestioning anti-technology.

So whether technological advance is a good thing or sustainable depends on
the choices we make, and on the social, political, and economic systems we
use. We live in a universe which contains effectively infinite resources
of matter and energy, yet at the moment we are stuck on a planet whose
resources can only be stretched so far. Anarchists (and others) differ as
to their assessments of how much development the earth can take, and of the
best course for future development, but there's no reason to believe that
advanced technological societies per se cannot be sustained into the
foreseeable future if they are structured and used properly.

We noted earlier (H.4) that competition between syndicates can lead to
"petty-bourgeois cooperativism," and that to eliminate this problem, the basis
of collectivisation needs to be widened so that surpluses are distributed
industry-wide or even society-wide. We also pointed out another advantage
of a wide surplus distribution: that it allows for the consolidation of
enterprises that would otherwise compete, leading to a more efficient
allocation of resources and technical improvements. Here we will back up
this claim with illustrations from the Spanish Revolution.

Collectivization in Catalonia embraced not only major industries like
municipal transportation and utilities, but smaller establishments as
well: small factories, artisan workshops, service and repair shops, etc.
Augustin Souchy describes the process as follows: "The artisans and small
workshop owners, together with their employees and apprentices, often
joined the union of their trade. By consolidating their efforts and
pooling their resources on a fraternal basis, the shops were able to
undertake very big projects and provide services on a much wider scale. .
. . The collectivisation of the hairdressing shops provides an excellent
example of how the transition of a small-scale manufacturing and service
industry from capitalism to socialism was achieved."

"Before July 19th, 1936 [the date of the Revolution], there were 1,100
hairdressing parlors in Barcelona, most of them owned by poor wretches
living from hand to mouth. The shops were often dirty and ill-maintained.
The 5,000 hairdressing assistants were among the most poorly paid
workers. . . Both owners and assistants therefore voluntarily decided to
socialize all their shops.

"How was this done? All the shops simply joined the union. At a general
meeting they decided to shut down all the unprofitable shops. The 1,100
shops were reduced to 235 establishments, a saving of 135,000 pesetas per
month in rent, lighting, and taxes. The remaining 235 shops were
modernized and elegantly outfitted." From the money saved, income per
worker was increased by 40 percent, with everyone having the right to work
and all earning the same amount. "The former owners were not adversely
affected by socialization. They were employed at a steady income. All
worked together under equal conditions and equal pay. The distinction
between employers and employees was obliterated and they were transformed
into a working community of equals -- socialism from the bottom up"
["Collectivisation in Catalonia," in Dolgoff, The Anarchist Collectives,
pp. 93-94].

Therefore, cooperation ensures that resources are efficiently allocated
and waste is minimised by cutting down needless competition. As consumers
have choices in which syndicate to consume from as well as having direct
communication between consumer cooperatives and productive units, there
is little danger that rationalisation in production will hurt the interests
of the consumer.

It should be noted that Nozick makes a serious error in his case. He assumes
that the "use rights" associated with an anarchist (i.e. socialist) society
are identical to the "property rights" of a capitalist one. This is not
the case, and so his argument is weakened and loses its force. Simply put,
there is no such thing as an absolute or "natural" law of property. As J.S.
Mill points out, "powers of exclusive use and control are very various, and
differ greatly in different countries and in different states of society."
["Chapters on Socialism,"John Stuart Mill on Politics and Society, p. 354]
Therefore, Nozick slips an ideological ringer into his example by erroneously
interpreting socialism (or any other society for that matter) as specifying
a distribution of private property (like those he, and other supporters
of capitalism, believes in) along with the wealth.

In other words, Nozick assumes that in all societies property rights must
replace use rights in both consumption and production (an assumption that
is ahistorical in the extreme). As Cheyney C. Ryan comments, "Different
conceptions of justice differ not only in how they would apportion society's
holdings but in what rights individuals have over their holdings once they
have been apportioned." ["Property Rights and Individual Liberty", in
Reading Nozack, p. 331]

In effect, what possessions someone holds within a libertarian
socialist society will not be his or her property (in the capitalist sense)
any more than a company car is the property of the employee under
capitalism. This means that as long as an individual remained a member of
a commune then they would have full use of the resources of that commune
and could use their possessions as they saw fit. Such lack of absolute
"ownership" not reduce liberty any more than the employee and the company
car he or she uses (bar destruction, the employee can use it as they see
fit).

Notice also that Nozick confuses exchange with capitalism ("I offer you a
lecture once a week in exchange for other things"). This is a telling
mistake by someone who claims to be an expert on capitalism, because the
defining feature of capitalism is not exchange (which obviously took place
long before capitalism existed) but labor contracts involving capitalist
middlemen who appropriate a portion of the value produced by workers - in
other words, wage labour. Nozick's example is merely a direct labor contract
between the producer and the consumer. It does not involve any capitalist
intermediary taking a percentage of the value created by the producer. It
is only this latter type of transaction that libertarian socialism prevents --
and not by "forbidding" it but simply by refusing to maintain the conditions
necessary for it to occur, i.e. protection of capitalist property.

Lastly, we must also note that Nozick also ignores the fact that acquisition
must come before transfer, meaning that before "consenting" capitalist acts
occur, individual ones must precede it. As argued above, for this to happen
the would-be capitalist must steal communally owned resources by barring
others from using them. This obviously would restrict the liberty of those
who currently used them and so be hotly opposed by members of a community.
If an individual did desire to use resources to employ wage labour then they
would have effectively removed themselves from "socialist society" and so
that society would bar them from using its resources (i.e. they would
have to buy access to all the resources they currently took for granted).

It should also be noted here that Nozick's theory does not provide any support
for such appropriation of commonly held resources, meaning that his
(right) libertarianism is totally without foundations. His argument in
favour of such appropriations recognises that certain liberties are very
definitely restricted by private property (and it should be keep in mind
that the destruction of commonly held resources, such as village commons,
were enforced by the state - see section F.8.3). As Cheyney C. Ryan points
out, Nozick "invoke[s] personal liberty as the decisive ground for
rejecting patterned principles of justice [such as socialism] and
restrictions on the ownership of capital. . .[b]ut where the rights of
private property admittedly restrict the liberties of the average person,
he seems perfectly happy to trade off such liberties against material
gain for society as a whole." ["Property Rights and Individual Liberty",
in Reading Nozack, p. 339]

Again, as pointed out in section F.2 (What do "anarcho"-capitalists mean
by "freedom?") right-libertarians would better be termed "Propertarians."
Why is liberty according a primary importance when arguing against socialism
but not private property restricts liberty? Obviously, Nozick considers
the liberties associated with private property as more important than
liberty in general. Likewise, capitalism must forbid corresponding
socialist acts by individuals (for example, squatting unused property) and
often socialist acts between consenting individuals (i.e. the formation of
unions).

So, to conclude, this question involves some strange logic (and many
question begging assumptions) and ultimately fails in its attempt to prove
libertarian socialism must "ban" "capitalistic acts between individuals."
In addition, the objection undermines capitalism because it cannot support
the creation of private property out of communal property in the first
place.